Weighing the Online Donation Option

(Oct. 12, 2010) While a large majority of donations are still made by check (79 percent), those who do donate by bankcard are very satisfied, and are loyal donors, according to new research from Visa conducted in partnership in AFP.

The Visa study, which used data from March from a national sample of Visa card holders, found that 36 percent of consumers prefer to use a bankcard (credit card or debit card) to make a charitable donation. This is compared to 54 percent who still prefer to donate by check.

Only about 9 percent of donations are made with a debit or credit card. However, over the past few years, credit and debit card donations have seen double digit growth. Visa reports 25 percent growth in the past year alone.

Visa also found that donors who donate by bankcard tend to be younger (age 30 to 39 particularly) and have greater education and income levels.

Those who donate by bankcards say it is an easy, automatic, safe and more secure way to donate, and offers better ways to keep track of donations. And, with the growth of new media such as texting and social media, the bankcard option continues to grow more popular.

Donating More Online

In fact, according to the Visa study, people who donate online give more overall. At the $500 and above gift level, more people donate online with bankcards than checks.

In describing the benefit of having an online donation program at your nonprofit, Visa says it is important to remember that although there is setup time and cost for bankcard transactions--as well as some fees for online transactions--these fees are lower for charities. There are also many hidden costs of processing checks that you may not have considered, such as lockbox expenses and administrative costs.

Recurring Contributions

Visa also says, based on its research, that people using credit or debit cards give more and live up to their commitments better. For example, donors who have set up a monthly or other recurring donation with a bankcard are more likely to complete their gift in full.

Based on 2009 data for 13 charities, 90 percent of people using bankcards completed their commitments on recurring donations, versus 79 percent of check based commitment.

Visa notes that 8 percent of online transactions by its customers are recurring--and the number is growing. Their research found that people have interest in recurring gift programs. Thirty-three percent already do or would consider setting up a recurring donation. They said they most prefer monthly, followed by quarterly payments.

For nonprofits that decide not to set up an online giving program by credit card or debit card, there are other options offered by the major credit card companies. The Visa Giving Gateway, for example, allows Visa cardholders to search a directory of charities (a directory to which charities are invited to add their listing) and donate to the charity they choose. The money (less fees) then goes to the charity.

To view a slideshow presentation by Visa on their latest research, click here. For a copy of the slides and other background information visit the AFP Information Exchange (login required).